U.N. Warns of Potential Food Crisis

World food prices surged in July after falling in the previous three months and could rise further, increasing the potential for a food crisis of the kind seen in 2007/08, the United Nations food agency said on Thursday.

"Prices have the potential to increase further," the Food and Agriculture Organisation's senior economist and grain analyst Abdolreza Abbassian told Reuters. "Definitely it is not going to be a season where prices fall below the previous year."

A food crisis erupted five year ago as soaring grain futures markets helped push up prices and sparked violent food riots, although a rerun would only happen if countries started to introduce policies such as export bans, he said.

The FAO Food Price Index, which measures monthly price changes for a food basket of cereals, oilseeds, dairy, meat and sugar, averaged 213 points in July, up 12 points from June, and back to levels seen in April this year, the FAO said in a monthly index update.

July's level is still below a record of 238 points reached in February 2011, FAO said, but close to levels seen during the food crisis in 2007/08.